Kamath-Meier Corporation's CFO Uses This Equation,which Was Developed by Regressing

question 29

Multiple Choice

Kamath-Meier Corporation's CFO uses this equation,which was developed by regressing inventories on sales over the past 5 years,to forecast inventory requirements: Inventories = $22.0 + 0.125(Sales) .The company expects sales of $400 million during the current year,and it expects sales to grow by 30% next year.What is the inventory forecast for next year? All dollars are in millions.

• A)$74.6
• B)$78.5
• C)$82.7
• D)$87.0
• E)$91.4

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Definitions:

Value of K

A specific value or constant used in calculations, varying in meaning across different mathematical or scientific contexts.

Cyclical Effect

A pattern of fluctuations observed in economic or business activities corresponding to the phases of the business cycle, such as expansion, peak, contraction, and trough.

Seasonal Effect

A periodic effect that recurs or fluctuates in a predictable pattern over a year due to the change in seasons.

Time Series

A sequence of data points collected or recorded at successive time intervals, often analyzed to identify trends, cycles, and forecasts.